Overstock.com 2015 Annual Report Download - page 54
Download and view the complete annual report
Please find page 54 of the 2015 Overstock.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44 -
45 -
46 -
47 -
48 -
49 -
50 -
51 -
52 -
53 -
54 -
55 -
56 -
57 -
58 -
59 -
60 -
61 -
62 -
63 -
64 -
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
 |
 |
Gross margins for the past eight quarterly periods and years ending December 31, 2015 and 2014 were:
Direct
10.0%
9.3%
4.9%
3.8%
7.0%
Partner and other
19.8%
19.9%
19.8%
18.3%
19.4%
Combined
18.9%
19.0%
18.5%
17.3%
18.4%
Direct
13.0%
11.3%
12.5%
12.5%
12.3%
Partner and other
19.5%
19.7%
19.7%
18.7%
19.3%
Combined
18.8%
18.8%
19.0%
18.2%
18.6%
The 530 basis point decrease in direct gross margin for the year ended December 31, 2015, as compared to the same period in 2014, was primarily
due to increased warehousing costs due to additional warehouse space and increased promotional activities including coupons, site sales, and Club O
Rewards (which we recognize as a reduction of revenue) due to our driving a higher proportion of our sales using such promotions.
The 8 basis point increase in partner gross margin for the year ended December 31, 2015, as compared to the same period in 2014 was primarily due
to a continued shift in sales mix into higher margin home and garden products, partially offset by increased promotional activities including coupons, site
sales, and Club O Rewards (which we recognize as a reduction of revenue) due to our driving a higher proportion of our sales using such promotions.
Cost of goods sold includes stock-based compensation expense of $179,000 and $181,000 for the years ended December 31, 2015 and 2014,
respectively.
Fulfillment costs include all warehousing costs, including fixed overhead and variable handling costs (excluding packaging costs), as well as credit
card fees and customer service costs, all of which we include as costs in calculating gross margin. We believe that some companies in our industry, including
some of our competitors, account for fulfillment costs within operating expenses, and therefore exclude fulfillment costs from gross margin. As a result, our
gross margin may not be directly comparable to others in our industry.
The following table has been included to provide investors additional information regarding our classification of fulfillment costs, gross profit and
margin, thus enabling investors to better compare our gross margin with others in our industry (in thousands):
Total revenue, net
$ 1,657,838
100%
$ 1,497,103
100%
Cost of goods sold
Product costs and other cost of goods sold
1,279,766
77.2%
1,152,489
77.0%
Fulfillment and related costs
73,418
4.4%
65,555
4.4%
Total cost of goods sold
1,353,184
81.6%
1,218,044
81.4%
Gross profit
$ 304,654
18.4%
$ 279,059
18.6%
Fulfillment costs as a percentage of sales may vary due to several factors, such as our ability to manage costs at our warehouses, significant changes
in the number of units received and fulfilled, the extent to which we use third party fulfillment services and warehouses, and our ability to effectively manage
customer service costs and credit card fees. Fulfillment and related costs remained relatively flat during the year ended December 31, 2015 as compared to
2014.
See above for additional discussion.
53